Bitcoin As an Investment Vehicle

Bitcoin is often referred to as an investment vehicle, even though that term is thrown around quite loosely by many people. In the early days of bitcoin, people would buy up cheap coins in the hopes of not only growing the network by giving out free BTC, but also because the price per coin would hopefully increase. And that certainly fits the description of an investment vehicle.

That said, the bitcoin price has come a long way since the digital currency’s inception in 2009. In the early days, every bitcoin being mined was virtually worthless, a trend that continued for quite some time until the network started to grow and more people shared an interest in bitcoin.

As interest in bitcoin grew, the market price experienced a slow but steady uptrend between 2010 and 2013. 2013 was an especially interesting year for bitcoin, when the price per coin rapidly increased and reached an all-time high of U.S. $1,163. As was to be expected, this price could not hold its ground, and the value started dropping again slowly after.

Until the end of 2014 and early 2015, the bitcoin price kept falling lower and lower, despite an increase in merchant adoption and the number of wallets created. Some financial experts saw this as the downfall of bitcoin, whereas others saw it as merely the beginning of a new era for the disruptive digital currency and perhaps of some currency speculators being shaken out of the market.

In simple financial terms, there was a bubble in the bitcoin price followed by a crash which has seen the price return to levels comparable prior to the bubble. It remains unclear who was right. But one thing’s for sure: Reports about bitcoin’s demise are greatly exaggerated. The figure shows the ups and downs of bitcoin’s price through the years.

Data courtesy of Coindesk. The price of bitcoin has fluctuated.

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